JFE Holdings Inc., Japan’s second-biggest steelmaker, forecast a full-year profit of 180 billion yen ($1.76 billion), lagging expectations amid a chronic oversupply of steel in China.
Analysts’ forecasts were for a full-year current profit, or pretax profit from operations, of 201 billion yen, according to an average of 15 surveyed by Bloomberg. The company said overseas markets remain unfavorable, citing the Chinese supply glut, in a first-quarter earnings statement posted to the Tokyo Stock Exchange today.
“The company’s forecast is conservative,” said Kazuhiro Harada, senior analyst at SMBC Nikko Securities Inc. “Given the current demand environment, there’s room for their earnings to exceed the guidance provided today.”
Earnings in the quarter ended June 30 saw operating profit rise 25 percent to 31.4 billion yen from 25.1 billion yen a year earlier, as the Tokyo-based company pared costs and increased sales, which rose 11 percent to 927.6 billion yen.
Net income fell 33 percent to 15.5 billion yen after the company booked a one-time impairment charge at its trading unit.
Japan’s economy continued to see a moderate recovery in the quarter, the company said.
JFE Holdings stock fell 0.4 percent to 2,180 yen at the Tokyo close, erasing gains made earlier in the day before the earnings release.
Nippon Steel & Sumitomo Metal Corp. and Kobe Steel Ltd., Japan’s biggest and third-biggest steelmakers, are scheduled to release quarterly results tomorrow.
Source: Bloomberg
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